Cooperation and Conflict in US-China Clean Energy Relations

Transcription

1 Cooperation and Conflict in US-China Clean Energy Relations Joanna Lewis Assistant Professor of Science, Technology and International Affairs Edmund. A Walsh School of Foreign Service Georgetown University Fellow at the Woodrow Wilson International Center for Scholars ( ) Presented at the China Environment Forum May 9, 2012

2 Catalysts for Cooperation o The United States and China: are the world s two largest economies and largest producers and consumers of energy, as well as the largest GHG emitters are highly dependent on coal for electricity, and on imported oil, making energy security a major concern, and diversification of supply a high priority have leaders that see clean energy innovation as a means to inspire economic competitiveness are in the process of expanding 21 st Century energy infrastructure that can be significantly influenced by advanced technology. 2

3 Catalysts for Conflict o Complications with promoting renewable energy technologies while following the rules of the global trade system o Imbalances in renewable energy technology development and deployment o Global economic downturn and current domestic policy environments for clean energy o Sino-US politics (leadership transitions) 3

4 US-China Clean Energy Cooperation 4

5 : Focus Primarily on Basic Research o U.S.-China Agreement on Cooperation in Science and Technology (S&T Agreement) (1979) o MOU for Bilateral Energy Agreements (1979) o U.S.-China Protocol for Cooperation in Atmospheric Science and Technology (1979) o U.S.-China Agreement on High Energy Physics (1979) o U.S.-China Protocol on Nuclear Physics and Magnetic Fusion (1983) o U.S.-China Protocol on Cooperation in the Field of Fossil Energy Research and Development (The Fossil Energy Protocol) (1985) o Annex III to the U.S.-China Fossil Energy Protocol Cooperation in the Field of Atmospheric Trace Gases (1987) Adapted from Lewis, 2010; R. Marlay 2011

6 : Start of Policy Discussions o Sino-American Conference on Energy Demand, Markets and Policy in Nanjing (1988) o Joint Commission on Commerce and Trade (JCCT) (1992) o U.S. Commercial Mission to China (1993) o Establishment of the Beijing Energy Efficiency Center (BECon) o China Agenda 21 Document Released (1994) o U.S.-China Protocol for Cooperation in the Fields of Energy Efficiency and Renewable Energy Technology Development and Utilization(1995) & Annexes (1996) o U.S.-China Forum on Environment and Development (1997) o U.S.-China Oil and Gas Industry Forum (1998) o U.S.-China Agreement of Intent on Cooperation Concerning Peaceful Uses of Nuclear Technology (PUNT) (1998) Adapted from Lewis, 2010; R. Marlay 2011

7 : Enhanced Bilateral (& Multilateral) Cooperation o U.S.-China Fusion Bilateral Program (2002) o U.S.-China Statement of Intent on Nuclear Non-Proliferation (2003) o Carbon Sequestration Leadership Forum (2003) & ITER (2003) o FutureGEN Near Zero Emissions Coal Project (2003) o U.S.-China Green Olympic Cooperation Working Group (2004) o DOE China Office Opened (2005) o U.S.-China Energy Policy Dialogue (2005) o Asia-Pacific Partnership on Clean Development and Climate (2006) o U.S.-China Strategic Economic Dialogue (SED) (2006) o Global Nuclear Energy Partnership (2007) o U.S.-China MOU on Cooperation on the Development of Biofuels (2007) o U.S.-China Bilateral Civil Nuclear Energy Cooperative Action Plan (2007) o U.S.-China Westinghouse Nuclear Reactor Agreement (2007) o U.S.-China Ten-Year Energy and Environment Cooperation Framework (Ten-Year Framework) (2008) Adapted from Lewis, 2010; R. Marlay 2011

8 2009: New Focus on Clean Energy o U.S.-China Memorandum of Understanding to Enhance Cooperation on Climate Change, Energy and the Environment o U.S.-China Climate Change Policy Dialogue o U.S.-China Electric Vehicles Initiative o U.S.-China Energy Efficiency Action Plan o U.S.-China Renewable Energy Partnership o U.S.-China 21 st Century Coal Partnership o U.S.-China Shale Gas Resource Initiative o U.S.-China Energy Cooperation Program o U.S.-China Clean Energy Research Center Adapted from Lewis, 2010; R. Marlay 2011

9 US-China Clean Energy Conflict 9

10 Cases to Date o China s solar industry Started with German complaints to EU in August 2009 USW petition in September 2010 raised profile in US US subsidy and anti-dumping investigations initiated in late 2011, action taken in 2012 o China s wind industry Wind subsidy with local content - only investigation resulting directly from USW petition China removed it before duties imposed Separate case, on wind components, initiated late 2011, investigation underway o Ontario, Canada s Feed-in Tariff Began with Japanese complaint, later joined by EU Consultations failed, WTO dispute settlement underway o Chinese investigation of US RE policies MOFCOM investigation of state-level RE incentives in Washington State, Ohio, New Jersey, Massachusetts, and California that include local content incentives and federal procurements under the Buy-American Provision of the ARRA 10

11 Wind and Solar Markets in the US and China 11

12 Clean Energy Investment: US & China

13 Wind and Solar Power Installations, USA & China BP 2011; Burgess 2012; Lacey

14 Leading Global Solar Markets Germany 10% Rest of Asia 5% S. Korea 3% Japan 8% Rest of Europe 3% PV Cell Production Malaysia 5% USA 5% Taiwan 13% Africa & Middle East 0% China 48% China 2.2% France 2.6% Czech Republic 4.9% US 6.3% Italy 8.8% Installed PV Capacity Belgium 2.0% South Korea 1.4% Japan 9.1% Rest of World 9.3% Spain 9.8% Germany 43.5% Geographic Distribution of Solar PV Cell Production and Installed PV Capacity, 2010 Lewis, Emerging Conflicts in Renewable Energy Policy and International Trade Law, WREF Data from Eurobserv-er 2011, BP

15 Leading Global Wind Markets Installed Wind Capacity Wind Turbine Production Canada 2.0% Italy 2.9% United Kingdom 2.9% India 6.5% France 3.0% Portugal 1.9% Rest of World 16.1% Spain 10.2% Germany 13.7% China 22.4% US 20.2% Mingyang (China) 4% Siemens (Germany) 6% Guodian United (China) 7% Suzlon (India) 7% Other 21% GE (USA) 8% Vestas (Denmark) 13% Enercon (Germany) 8% Sinovel (China) 9% Goldwind (China) 9% Gamesa (Spain) 8% Leading Wind Turbine Manufacturers by National Ownership, 2011 Lewis, Emerging Conflicts in Renewable Energy Policy and International Trade Law, WREF Data from Blackwell

16 Chinese-Owned Turbine Manufacturers Increasingly Dominate Chinese Market Lewis, Green Innovation in China, Forthcoming

17 US Solar Imports and Exports to China imports 2010 exports imports 2011 exports 2010 trade surplus 2011 trade deficit Million US Dollars Million US Dollars PV Capital Equipment PV Polysilicon PV Wafers PV Cells PV Modules Total PV Capital Equipment PV Polysilicon PV Wafers PV Cells PV Modules Total Lewis, Emerging Conflicts in Renewable Energy Policy and International Trade Law, WREF Data from Coalition for American Solar Manufacturing 2012) 17

18 Renewable Energy Support Measures and Potential Trade Conflicts o Renewable energy support measures Prohibited subsidies Actionable subsidies o Industrial policy measures Promoting domestic manufacturing Government procurement o WTO Conflicts? SCM agreement; TRIMS/TRIPS o Complications? Government procurement (&GPA) Non-market economies and trade remedies Environmental exemptions (GATT)? 18

19 Renewables & Trade: A Special Case? o Subsidies are widely granted across the world to the energy sector for a variety of reasons Both the traditional and renewable energy sectors have benefited from these subsidies The vast majority of subsidies are provided to the fossil energy sector, although the magnitude of subsidies available for renewable energy is growing worldwide o Renewable energy subsidies could be argued to level the playing field with fossil fuels not provide an advantage or distortion o Green industrial policy can be considered a global public good promotes green technology access and cost reductions Industrial policy that has been previously used in industrialized countries would now be considered prohibited under various WTO agreements, raising issues of equity and technology access (non-actionable subsidies?) o Major conflicts emerging between international trade law and global climate mitigation Leading some to suggest a WTO exception (GATT Article XX(b)&(g)) may permit otherwise discriminatory measures for environmental protection) or even a Sustainable Energy Trade Agreement

20 Implications o There is no overarching regulation in international law addressing energy which leads to a fragmented approach, and conflicts between trade law and MEAs o As more countries promote renewable energy to address climate change and energy security, and technology markets are increasingly competitive, disputes likely to increase o Disputes are creating spillovers into other areas of bilateral relations, e.g. threatening the more positive aspects of US-China clean energy cooperation 20